UK General Discussion: Rishecession

[mileslunn]

What happens if a Tory MP votes against budget or parts of it.  I've heard scrapping the additional rate is unpopular with some Tory MPs.  Probably not enough to stop it but if one voted it down, do they get booted out of party.

I also think a tax cut for the rich whether one thinks if a good or a bad idea, the optics and timing are absolutely horrible and comes across as very tone deaf.  If economy was booming and UK had a large surplus, probably could get away with it.  Or if it was done by cutting deductions and loopholes so revenue neutral maybe.  That being said idea of lower top rate seems to be based on idea UK top rates are uncompetitive which is false.

Most of Canada, France & Japan have top rates above 50%.  Sweden, Denmark, Finland, Belgium, Ireland (if you include PRSI), France, Austria, Portugal, parts of Spain (they are hiking taxes on rich but details not known), Israel and Japan all over 50% as well as some high taxed states in US like California and New York City.  Heck even his remarks on US, Italy and Norway were false.  Norway's top rate is 39.2% but when you include social security contributions it is 47.4% and if self employed 50.6% so just scrapping NIC hike would push below.  US is 37%, but since most states have state taxes, only in states with no state tax like Texas and Florida is UK higher then.  Italy is 43%, but has regional and municipal taxes so average is 45-47%, i.e. what UK was before. 

And even at 45%, Iceland, Norway, Netherlands, Germany, most of Spain, Italy, South Korea, and Australia, and higher taxed US states are in high 40s.  I could be wrong, but I just don't see how big tax cuts for rich is going to a vote winner.  At same time Labour has to be careful in reversing.  Previous cut from 50% to 45% Labour opposed and lost that election.  But I think Labour could easily push raising it to 45%.  Pushing to 50% might be tougher but with huge deficit might have no choice but could make 50% temporary instead of permanent.

[mileslunn]

Not living in UK, but visiting there frequently, what has been public reaction to tax cuts?  I know in Canada it would be political suicide where I live and in fact we've gone in opposite direction of taxing rich more not cutting them.  US I know is mix as GOP tends to cut taxes for rich, Democrats raise them.  But I am thinking optics of dropping additional rate look horrible and unless British culture is one that admires rich and think they are big job creators I cannot see it being popular.  Be interested for those on ground what they are hearing.

And if Labour wins, I presume they would at least raise it to 45%, but would they go further and push back to 50% where it was under Brown or just back to 45%?  I am thinking latter but curious what others hearing.

[mileslunn]

The reaction has been broadly negative, though not viscerally so. Everyone knows it's a tax cut for the rich but those one the lower bands do also benefit of course. The stamp duty cut will be beneficial to a certain demographic (of which I happen to be a part) who are trying to buy a house in an expensive area like the South West.

Labour indicated today that they would reinstate the top tax rate (45%) whilst leaving in place the Tory tax cut to the lower bands.

This is smart politics and I think the average British person would agree with Starmer's stance here.

Yeah makes sense.  I wonder if they would go for 50% which is what they have pushed in past elections or if that is a bridge too far as it seems going to 45% would get little push back, 50% probably somewhat more although perhaps mostly in more posh areas not areas they are targeting.

[mileslunn]

Its basically your classical supply side economics budget.  Problem is while supply side economics was super popular in 80s, its not now as has been tried in enough places and the results are not like those pushing it claim.  Tax cuts mainly aimed at wealthy don't lead to growth.  Kansas experiment, Reagan tax cuts, Bush tax cuts, and Trump more recently largely show this. 

The bottom rate cut which was more expensive may help in that lower income tend to spend most although timing may be not best.  But Labour smart to say will keep it.  Scrapping additional rate won't cost a lot of money, but rational for it is weak.  Cutting additional rate from 50% to 45% as George Osborne did had some logic as UK was still in EU then and 50% is on high side although not highest and worry was might drive away some high earners.  But UK is no longer in EU so that risk less and most countries in EU are either close to or over 45% and those under are mostly in Eastern Europe where average wages a lot lower so any savings on tax cuts more than offset of lower wages.

California's high top marginal rates has lead to many leaving, but Canada has just as high and is not seeing mass exodus.  Reason is US is a country with free mobility, while Canada is a separate one.  So since UK does not have free mobility with anyone save Ireland thus rational gone.  And besides looks totally tone deaf.

On corporate taxes, yes Ireland shows low corporate taxes can work.  But UK is a lot larger and is more comparable to France & Germany who have corporate tax rates of 25% and 29% so I would argue being a member of EU does far more to encourage businesses to locate there even if corporate taxes slightly higher. 

Finally it is all deficit financed and I learned in my university economics deficit financed tax cuts don't stimulate more investment as most investors price in that higher deficits mean higher taxes down the road so already priced in.  A lot instead probably going on idea Labour will win at some point and with massive deficit, taxes will go up.

[mileslunn]

https://redfieldandwiltonstrategies.com/latest-gb-voting-intention-25-september-2022/ first poll out post budget and doesn't exactly look good for government.  Truss needs to hope that her plan for growth materializes.  Yes Truss can still win the next election, but not off to a good start and seems to be doing everything to help Labour so far.

[mileslunn]

Its basically your classical supply side economics budget.  Problem is while supply side economics was super popular in 80s, its not now as has been tried in enough places and the results are not like those pushing it claim.  Tax cuts mainly aimed at wealthy don't lead to growth.  Kansas experiment, Reagan tax cuts, Bush tax cuts, and Trump more recently largely show this. 

The bottom rate cut which was more expensive may help in that lower income tend to spend most although timing may be not best.  But Labour smart to say will keep it.  Scrapping additional rate won't cost a lot of money, but rational for it is weak.  Cutting additional rate from 50% to 45% as George Osborne did had some logic as UK was still in EU then and 50% is on high side although not highest and worry was might drive away some high earners.  But UK is no longer in EU so that risk less and most countries in EU are either close to or over 45% and those under are mostly in Eastern Europe where average wages a lot lower so any savings on tax cuts more than offset of lower wages.

California's high top marginal rates has lead to many leaving, but Canada has just as high and is not seeing mass exodus.  Reason is US is a country with free mobility, while Canada is a separate one.  So since UK does not have free mobility with anyone save Ireland thus rational gone.  And besides looks totally tone deaf.

On corporate taxes, yes Ireland shows low corporate taxes can work.  But UK is a lot larger and is more comparable to France & Germany who have corporate tax rates of 25% and 29% so I would argue being a member of EU does far more to encourage businesses to locate there even if corporate taxes slightly higher. 

Finally it is all deficit financed and I learned in my university economics deficit financed tax cuts don't stimulate more investment as most investors price in that higher deficits mean higher taxes down the road so already priced in.  A lot instead probably going on idea Labour will win at some point and with massive deficit, taxes will go up.

Reagan Tax Cuts did work but there still is a major difference between doing them in the 1980s and now. Tax Rates were much higher when Reagan took office so the economic effect of them were greater than doing them now.

Very true and top rates were 70% when Reagan came to office which most economists would say is on wrong side of Laffer Curve.  UK was 45% now 40% and while peak of Laffer curve is unknown, its probably higher than 40%.  One UK economist put it at 48% so if you include NIC it was pretty close to that before cut.  Another put it at 55% which it is well below and even Labour is not silly enough to put it that high.

Sweden 2 years ago cut top rate from 57% to 52% and Netherlands from 52% to 49.5% so in both cases above 50% mark where I think there is strong argument from dropping them down as idea of state taking more than half your earnings for each additional dollar above a certain point probably has some negative but degree unknown.  But at 45% still keep most and most wealthy make their income in dividends or capital gains anyways which are/were taxed at 38.5% and 20% respectively.

If goal was to encourage wealthy to move to UK, likely fail as places like Monaco are significantly lower.  Rich may move if massive savings but not a few points.  So essentially 45% not high enough to push rich out and 40% not low enough to bring many in, in big numbers like tax havens do.  It would probably need to be 50% or higher to cause some to leave and likewise be under 20% to cause lots to move to UK.

[mileslunn]

Other than dogmatic ideological belief in supply side economics, I don't get the political rationale of the budget?  Yes I get she thinks economy will take off and win on that, but real world evidence is so overwhelming that you have to blind to reality to think otherwise.  Its not a new idea that has never been tried elsewhere even if not tried in UK in last 30 years.  

I mean winning votes from top 1% isn't nearly enough to win an election and I don't think most Brits are hostile to top 1%, but I don't think most either think they are in most need of help right at this moment.  Usually governments when they try something like this have lots of economic advisors who have a good grasp on risks and many politicians who propose risky ideas are dissuaded by advisors not to go there.  Its why UK didn't go for a hard Brexit even though a lot of Tories wanted that as probably all advisors told them flat out what would happen would be a disaster.

[mileslunn]

Some conservation charities are really not happy with the Government
https://twitter.com/RSPBEngland/status/1573366815568580613

(NB the RSPB has over a million members.)

It seems budget was ideologically driven and to heck with any opposition or impacts.  On one hand if it works, they will look like geniuses.  Still history is not on their side.  While such budgets haven't been tried in UK for a long time, US has plenty of more recent examples and at best they were neutral, at worst negative.  Yougov now has poll at 45% Labour to 28% Conservative. 

Be interesting how this plays out.  I don't think Truss will walk anything back and MPs don't want to remove her so quickly but if Labour maintains double digit lead through next year, I don't know how she survives.  Most want to hold their seats.

[mileslunn]

Wow. IMF bailouts are usually for third world countries.

UK won't require one.  Worst case scenario is ends up like Canada in mid 90s where government required a heavy austerity program to turn things around.  Off course not sure Labour willing to do that but may have no choice and probably leads to being one term wonder if forced to.

[mileslunn]

Wow. IMF bailouts are usually for third world countries.

UK won't require one.  Worst case scenario is ends up like Canada in mid 90s where government required a heavy austerity program to turn things around.  Off course not sure Labour willing to do that but may have no choice and probably leads to being one term wonder if forced to.

There was very likely less capacity to tax the better off in 1990s Canada than in the UK post-Truss.

(and the Liberals did of course get re-elected, for a few more elections at that)

Liberals didn't actually raise income taxes, mostly spending cuts but taxes did go up as brackets were frozen for seven years so lots of people moved into higher brackets thus paying more.  That was though compensated for after balanced budget.  Today top rates are actually higher than mid 90s, but mostly due to concerns of inequality not deficits as rates for middle and lower income much lower.

Big reason for no big tax hikes was dollar was quite low so brain drain to US already a problem and too big a tax convergence would have made it worse.  Probably due to Trump factor, Canadians moving to US much less so worries about tax divergence less than 90s.

[mileslunn]

I wonder if polling will impact whether Scotland drops their additional rate or not?  Lots calling for Scotland to drop theirs to avoid losing many high income.  But if it is widely expected Labour will win next election and they've already promised to reverse it, I doubt someone willing to spend cost to move for only 2 years of lower taxes.

If this numbers continue and big if, we could see a few upsets.  Do wonder though if Boris will stay on or step down as a by-election in his constituency would be telling.  Pretty sure Labour would gain it today.

[mileslunn]

Polling over the past few days has been quite something. Since the weekend, we've had polls from Redfield & Wilton, Deltapoll and YouGov, who poll weekly or biweekly. All have Labour at 44-45% and the Tories on 28-31%. Redfield's 13% lead is the largest they've recorded for Labour, as is YouGov's 17% lead.

This parliament has been an odd one for polling. A post-election honeymoon for the Tories built into a historic lead, thanks to a COVID bump. That lead dissolved after their first round of PPE contract scandals, and the first whispers of partygate around Christmas 2020. They recovered as the vaccine programme got underway (and benefitted as Labour had a terrible summer with the Hartlepool by-election), but the Matt Hancock debacle heralded a polling decline only sped-up by the resurgence of partygate.

The Tories haven't recovered the lead since last Christmas, and any hopes for a new-PM bounce seem to have evaporated. Short of an out-of-nowhere conference bump, it looks like we're settling into an extended period with Labour in the lead.

It's big turn-around compared to polling in the last few cycles. Corbyn never took a consistent lead over the Tories (basically trailing throughout his leadership), and while Milliband led in the aggregate for much of the coalition years, his leads were often only a few points over the Tories, and melted away during the election.

I guess it could be a mirage - Kinnock soared ahead as Thatcher's premiership collapsed, falling back to parity with the Conservatives as Major established himself. But Major was elected to steady the ship - Truss was elected to "run fast and break things". And like all PMs, Truss is likely to become less popular over time, not more.

That's not quite true, Labour were ahead from the 2017 GE to early 2018 (though never massively)

Tories also when Corbyn was leader never went below 38%.  By contrast most polls put them in low 30s and a few even below 30%.  Would be shocked if they get under 30% but getting less than 1 in 3 voters is pretty bad for Tories

[mileslunn]

I presume Labour will introduce an amendment to restore additional rate of 45% and bring back cap on banker's bonus so interested if any Tories will break ranks on this.  Tough spot if a Red wall one as vote for, risk having whip removed but vote against and will have huge target painted on back next election.  There are some parts of country where probably this won't be a huge issue.  If any a fairly posh constituency, people may not like it, but pushback will be less.  In Red Wall, I cannot see these two going over well.

My guess is not many, but I wouldn't be surprised if a few although if threat of whip being removed probably not many.  If Tories allow MPs to break ranks and doubt they will could be enough to sink both and maybe with backlash and horrible polling that is only way to climb down on those, but from what I know of Truss, she seems like type who doubles down no matter how unpopular.

[mileslunn]

Tories also when Corbyn was leader never went below 38%.  By contrast most polls put them in low 30s and a few even below 30%.  Would be shocked if they get under 30% but getting less than 1 in 3 voters is pretty bad for Tories

Um, erm, that's not actually true is it.

In fact, they recorded their lowest ever poll score when he was still around.

True but only when Brexit party surged into 20s.  I guess should have said combined right as combined right pretty much always was over 40% when he was leader not low to mid 30s like now.

[mileslunn]

Looking at just the politics of budget I don't get it.  Red wall gains weren't necessarily one off gains, levelling up and many of Johnson's moves had a real chance to make those permanent.  Sure due to fatigue of government they were going to lose some no matter what, but at least would be competitive in future elections.  Now with this, there is a possibility lose every single red wall seat and may make Tories toxic there for a generation.  Yes Tories can win without Red wall if they regain your upper middle class London seats, but that is a long shot and also is a very narrow path.  If only 330 or 340 seats winnable, majorities will be rare as rarely do parties win every single winnable seat.

And winning back or holding posh areas in London I am skeptical of.  For starters most with money tend to be economically literate and won't like collapsing pound so idea those with money only care about tax cuts and nothing else is false.  Never mind even in London, vast majority when will be paying more taxes according to IFS as despite bottom rate cut, refusal to adjust brackets with inflation means by 2026 those with less than £155,000 will be paying more and in no constituency do majority make that much.  Also London is much different than Thatcher era.  Back then it was only around 15% non-white, now closer to 40% and Tories have been stuck in 20s amongst BAME voters.  Never mind London is younger than most of UK and with current age gap also makes it tougher.  Back when Thatcher was PM, Tories led amongst under 40 voters, not trailing massively like now.  

Now yes if economy does take off, Truss may get lucky and win again.  But huge gamble as there is no serious economist who still believes in trickle down economics.  Yes most realize if taxes on rich are too high, they move elsewhere.  But few believe 45% is high enough to drive away talent.  50% maybe, but not 45%.  In fact where tried, all it does is lead to wealthy getting wealthier and less not more economic growth (see Bush vs. Clinton as former cut taxes for rich, latter raised them and growth much higher under Clinton than Bush).  So if UK economy does boom it will likely be in spite not because of Trusseconomics.  Nonetheless at least government can claim they are cause.

In fact I've heard so bad that many in city and business community would actually prefer a Labour government and that is quite something as normally both are reliable Tories.  Never mind only place where this tried multiple times is US and since US dollar is reserve currency, they can get away with all kinds of things no other country could.  They can run deficits higher than anyone else can be they spending or tax cuts for that simple reason.  

Still I don't think Tories will get wiped out.  Their vote is much more efficient than 1997 and with strong support amongst seniors who generally vote, I don't see them falling below 30% or 200 seats.  That being said, until recently Labour had no realistic path to a majority as needed Scotland and now big enough lead they could potentially win a majority with England alone.

Despite jitters, I suspect at least one or more MP has whip withdrawn, but I suspect number who vote down mini-budget of Tories will be in single digits so passes easily.  Interestingly enough Labour likely introduces amendment somewhat along these lines

1.  Windfall tax on energy companies to pay for price freeze
2.  Re-instate banker bonus limit
3.  Re-instate additional rate of 45%

Tories voting this down will look bad so if smart Truss would let members break ranks so gets rid of most offensive parts without having to backtrack personally.  But knowing her, MPs likely forced to vote this down and Labour will no doubt remind people of this come election time.  

[mileslunn]

You'd think they would at least make an effort to poll higher than 200 seats at the next election...

I think assumption is because Tory vote more efficient than in 1997 and still ahead amongst seniors who are more likely to show up, they will do so.  But fact its not a foregone conclusion is telling.

[mileslunn]

No election today so obviously results will be different but I am thinking if one held today would go like this by region

Scotland: SNP dominates, Tories wiped out, maybe lose all seats.  Labour picks up a few but not many

Wales: Labour dominates and Tories don't lose all seats, but fall to low single digits.  Plaid Cymru surges in votes but only gains a seat or two.

Northeast: Near Labour sweep.  Berwick upon Tweed and maybe Hexham only likely holds.

Northwest: Labour dominates but Tories hold a few safe rural constituencies.  LibDems hold current seat and maybe pick up Cheadle and Hazel Grove depending on how much tactical voting there is.

Yorkshire & Humber:  Labour dominates, but Tories hold the more rural ones like Sunak's seat (so Sunak would get his chance to run).

West Midlands: Labour gains a lot, but Tories still competitive and probably strong urban/rural divide.  Still seats like Stoke on Trent South, Dudley North, North Warwickshire would be interesting.  Uniform swing would still have Tories holding them, but unlike earlier, Labour at least has a chance to regain them but far from certain.

East Midlands: Labour narrow edge as sweeps all the marginals, but Tories still dominate the more rural parts, just not by the astronomical margins they did in 2019.

Eastern: Notwithstanding some polls, Tories still come out ahead there and thanks to concentrated vote, Labour just getting to 10 seats is probably a long shot. 

London: Labour wins big.  A few LibDem wins while Tories likely lose even most of the posh seats they were pandering to.  Extreme eastern edge which is very white but more working class is one part they hold onto.

Southeast: Mostly Tory, Labour wins in pockets but unlikely to beat Tories.  LibDems are wildcard as in Commuter Belt and rural constituencies, Labour is considered a bridge too far, but LibDems not.  If Starmer is seen as too risky, LibDem gains don't materialize but if not so scary some do.

Southwest: Mostly Tory with a few Labour pickups.  LibDems may gain some seats, but not like 2010.  The ancestral LibDem vote here is rural and fairly old so skeptical LibDems make big gains here.  But probably do better than uniform swing would suggest

[mileslunn]

Recent local and by-elections have indicated that anti-Tory tactical voting has increased hugely since 2019, so I certainly think things could start to spiral out of control pretty quickly for the Tories. In particular, I’m not sure I buy the Lib Dem vote being as low as it is in current polls, and I definitely don’t buy the Green vote being so high. Especially if there’s as much chaos with mortgages as seems very possible as a result of the current mess, I think the affluent Southeast could look a lot more orange…

I agree Greens probably underperform but mainly due to skew heavily younger who have lower turnout.  Still could top 5%, but probably get in double digits in university towns and core urban constituencies which Labour is winning anyways.  And that might help Labour on voter efficiency as fewer 70%+ seats than in 2017. 

Reform UK likely goes nowhere although Truss easing immigration is interesting and may help them but I doubt they do as well as UKIP did in 2015.  Truss is easing immigration as very market oriented as most free market fundamentalist tend to be pro-immigration whereas most Brexiters especially in North want less.

[mileslunn]

From a distance, it's almost impressive how brutally incompetent Truss is - some sort of amalgamation of the worst characteristics of Thatcher (without any intellect) or Reagan (without any charisma), on top of being particularly ill-advised. Like Æthelred, Elizabeth the Unready...

Also trickle down economics was a novel idea in 80s that have never been tried whereas now it has been and best example of it flopping was Kansas experiment.

Thatcher did cut income taxes, but offset by VAT rises so yes made tax system less progressive, but wasn't funded through borrowing.  Also 83% and even 60% is probably too high.  Backlash to Osborne dropping additional rate from 50% to 45% was much more muted than current top rate cut.  

Reagan was a mix.  His first cut led to massive deficit which George HW Bush called voodoo economics in RNC race and they had to raise taxes to pay for it.  But at least top rate cut was 70% to 50% and you could more easily justify 70% as being too high.  Second Reagan tax cut got bipartisan support as yes cut income tax rates dramatically, but wiped out a lot of loopholes so actual amount wealthy paid was unchanged as many deductions and loopholes they had before were eliminated.  Kwarteng didn't do this.

Closest example in US was Bush tax cuts which were supposed to be self financing but were not and in fact economy grew much slower under George W. Bush than it did under Bill Clinton.  That is not to say tax cuts mean slower growth, just unless at prohibitive levels they have no impact either way.  Kennedy's tax cuts in 60s from 91% to 70% were example of trickle down working but then again that was probably a case where top rate was on wrong side of Laffer Curve.  

Had budget actually gotten ORB review I suspect markets would have been calmer.  But at same ORB would have also probably told government outright what they were doing was ridiculous thus why refused.  

[mileslunn]

From a distance, it's almost impressive how brutally incompetent Truss is - some sort of amalgamation of the worst characteristics of Thatcher (without any intellect) or Reagan (without any charisma), on top of being particularly ill-advised. Like Æthelred, Elizabeth the Unready...

She almost seems like she is deliberately trying her best to make her Tory predecessors look positive in comparison, which is quite the feat (in less than a month too). The jokes about her being a Labour - or more fittingly, Lib Dem - plant abound...

I suspect some foreign leaders on left smiling as will use Truss as example in attack ads against opponent.  Trudeau who is struggling in polls probably will against Poilievre who while he is not giving much detail on tax and spending policy, he is like her very much a small government libertarian type.

In New Zealand, Luxon has promised to drop top rate from 39% to 33% and Ardern is trailing now so I bet she makes this comparison in next year's election.

In Spain, government is planning to hike taxes on wealthy and bet doing so to try and trip up popular party as it regional levels, right wing governments in Madrid & Andalusia scrapped wealth taxes so last ditch to try and prevent defeat (in case of Spain I don't think it will be enough).

In Canada and New Zealand it might work however.  In US Biden probably uses against whomever he faces in GOP race, but in US you have a much larger chunk of population who still buys into trickle down economics than in UK.  US is far more polarized and a lot blindly support whatever their preferred party does.  At least GOP probably does hit rich in blue states by making SALT cap permanent.

[mileslunn]

There's honestly a real possibility - I will go no further! Simply a possibility - that the walls cave in on all sides.

There are various means by which the Tories can carefully orchestrate their own exit strategy. It is apparent they don't really want to keep going until the term ends, because there's almost zero chance of a return to growth, or have another 'contest' as the MP's don't trust/like their own hollowed out membership who get to decide.

There's an appetite for opposition.

Labour are chipper because there's genuinely, a dawning inevitably where it matters, (press and business) that they will win. Starmer isn't stellar, but there can never be another 'Blair' because there will never be one nor does anyone want one (because looking back, personality wise, we're too jaded to see that style anything other than rightfully, 'cringe'.)

Labour can project anything they want onto him when the time comes because when the time comes, Labour will probably have to be more redistributionist and progressive in taxation than they let on. And the public have an appetite for that anyway, in part to the current governments 'fill your boots' action on COVID and energy bills (which first lifted Labour in the polls earlier this summer.)

The Bank of England and the IMF have taken the government out back to be shot.

It's when and how this happens that needs to be determined.

Dull and boring sometimes work.  Yeah Starmer is more like Biden than Trudeau, Ardern, or Obama.  But Biden won for same reason.  He is also somewhat like Olaf Scholz too who is dull and boring but non-threatening. 

On taxes, that will be interesting as wonder if they go for wealth tax or push additional rate up to 50% like it was under Brown.  But I suspect either done after elected as running on such will just alienate business community.  Mind you I suspect public would be okay with both.  And on 50%, Starmer could argue that it was too high when EU member due to free mobility of labour thus risk wealthy would leave, but now outside of EU that is no longer case.  Canada and Japan both have top rates over 50% and since neither has free mobility with any foreign country its why they can do so without major brain drain.  If Canada had free mobility of labour with US, there is no way our top marginal rates would be as high as they are now.

Also on nationalisation front, he seems to have found a way to pacify momentum types but not scare rest.  Not renewing rail contracts and bringing back into public ownership when they expire costs nothing and is quite popular.  For energy, he promises to create a new public one, not buy out existing ones like Germany is doing with Uniper or France with EDF.  Buying back grid and big five energy companies would be too costly so wise not to go there.  Also avoiding water and Royal Mail as most may think privatisation of those a mistake; cost of bringing back into public ownership way too high.

I guess on those two could buy maybe just a 10% stake and use profits to increase share.  But would take over a decade just to get to over 50% ownership and probably a generation to return to full public ownership doing this so not really worth it.  I do think though if Royal Mail or water companies go bankrupt, he would nationalise them.  Tories under Cameron did this with Network Rail.

[mileslunn]

This is for US and about GOP https://www.youtube.com/watch?v=srJZHQHHT8g but could just as easily be applied to Truss.  Couldn't be applied to Johnson and not even Cameron.  I bet Truss and Kwarteng if just shown three myth parts would say they are fully true.  Not saying I fully agree with Robert Reich, but his attack on GOP could be just as easily applied to Truss only substituting names and party name and keeping every other word, word for word the same.

[mileslunn]

https://www.theguardian.com/politics/2022/sep/28/liz-truss-kwasi-kwarteng-tory-mps-sack-or-mutiny this suggests a lot of fury amongst Tory MPs.  Will be interesting to see if goes through and if all parts kept.  I suspect Truss and Kwarteng to double down but could be bad enough maybe no choice.  I even could see some Red Wall Tory MPs maybe thinking that voting for Labour amendments to strip most unpopular parts might be only hope at saving seats as if election they can at least say they personally didn't support this.

[mileslunn]

Honest question: how possible do we think it is that Truss call's a GE to avoid yet another leadership challenge?

Boris didn't do it, perhaps because at the end of the day he knew the public façade that he had more electoral support than internal support was a lie, or perhaps because he knew who was holding the knifes and what their likely electoral fate would be. I don't think at this point anyone would deny that Boris will be attempting to rewrite the past year, return to leadership of the party after a loss, and comeback like an exiled savior.

But Truss...well she doesn't seem to fully grasp her position. If there is already talk about internal letters being sent, then her position is precarious. Its not to hard to imagine her believing that intensification of partisan activism, like has been done here, will in the end win her the day - it did in the leadership vote after all. Or she could slap a three-line whip on these type of issues, or maybe even this, in an attempt to force everyone to heel but it backfires spectacularly.

I don't see an election before 2024.  Truss wants to put her small state ideas into action and hopes by some miracle economy takes off.  Despite her rhetoric, I really have a tough time believing she is dumb enough to believe to actually believe trickle down economics works.  I think she just ideologically believes in small state and since figures party likely to lose anyways is taking approach go big or go home and hoping due to other factors economy picks up and she can take credit for it.

Real question is due enough red wall MPs rebel.  They are in tough spot.

[mileslunn]

Even though I doubt Labour actually wins by 33 points, it is so bad now that even some normally safe Tory seats would be in danger.  I cannot see how she stays on as PM or Kwarteng as chancellor exchequer.  This is now a fight for survival.